The tax proposals target international tech firms like Facebook and Google.
Finance ministers from the Group of Seven advanced economies agreed on Saturday in London to a landmark deal to establish a global minimum tax rate of 15% for multinational companies, which have long reduced their tax bills by shifting profits to units set up in tax havens, and to wring more taxes out of giant tech companies. «The G-7’s decision on international tax justice is historic. It is very good news for tax justice and solidarity and bad news for tax havens around the world,” said German Finance Minister Olaf Scholz in a statement. The tax rules are specifically targeting multinational tech firms like Google, Facebook and Apple which have used tax havens. Governments have long struggled with the issue of taxing large companies that operate in various countries, but declare their profits in jurisdictions with low tax rates like Ireland, Hungary and Czech Republic, while actually selling their products and services elsewhere. The International Monetary Fund, among other entities, has championed a minimum global corporate tax rate, citing that the ease with which multinational companies can avoid paying higher taxes combined with a three-decade long decline in corporate tax rates, “undermines both tax revenue and faith in the fairness of the overall tax system.
